offenses appears more clearly from its position in this structure of sanctions.

The penalties imposed by Congress to enforce the tax laws embrace both civil and criminal sanctions. The former consist of additions to the tax upon determinations of fact made by an administrative agency and with no burden on the Government to prove its case beyond a reasonable doubt. The latter consist of penal offenses enforced by the criminal process in the familiar manner. Invocation of one does not exclude resort to the other. Helvering v. Mitchell, 303 U. S. 391. The failure in a duty to make a timely return, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, is punishable by an addition to the tax of 5 to 25 per cent thereof, depending on [496] the duration of the default. § 291 of the Revenue Act of 1936 and of the Internal Revenue Code. But a duty may exist even when there is no tax liability to serve as a base for application of a percentage delinquency penalty; the default may relate to matters not identifiable with tax for a particular period; and the offense may be more grievous than a case for civil penalty. Hence the willful failure to make a return, keep records, or supply information when required, is made a misdemeanor, without regard to existence of a tax liability. § 145 (a). Punctuality is important to the fiscal system, and these are sanctions to assure punctual as well as faithful performance of these duties.

Sanctions to insure payment of the tax are even more varied to meet the variety of causes of default. It is the right as well as the interest of the taxpayer to limit his admission of liability to the amount he actually owes. But the law is complicated, accounting treatment of various items raises problems of great complexity, and innocent errors are numerous, as appears from the number who make overpayments. It is not the purpose of the law to penalize frank difference of opinion or innocent errors made despite the exercise of reasonable care. Such errors are corrected by the assessment of the deficiency of tax and its collection with interest for the delay. §§ 292 and 294 of the Revenue Act of 1936 and of the Internal Revenue Code. If any part of the deficiency is due to negligence [497] or intentional disregard of rules and regulations, but without intent to defraud, five per cent of such deficiency is added thereto; and if any part of any deficiency is due to fraud with intent to evade tax, the addition is 50 per cent thereof. § 293 of the Revenue Act of 1936 and of the Internal Revenue Code. Willful failure to pay the tax when due is punishable as a misdemeanor. § 145 (a). The climax of this variety of sanctions is the serious and inclusive felony defined to consist of willful attempt in any manner to evade or defeat the tax. § 145 (b). The question here is whether there is a distinction between the acts necessary to make out the felony and those which may make out the misdemeanor.

A felony may, and frequently does, include lesser offenses in combination either with each other or with other elements. We think

The following statistics are given by the Commissioner of Internal Revenue for the fiscal year 1941 73,627 certificates of overassessment of income tax issued, for 39,730 of which no claims had been filed; 236.610 assessments of additional income taxes made; 871 investigations made of alleged evasion of income and miscellaneous taxes, with recommendation for prosecution in 239 cases involving 446 individuals, of whom 192 were tried and 156 convicted. The total number of income tax returns filed was 16.052,007, of which Annual Report of the Commissioner of Internal Revenue number 7,867,319 reported a tax.

(1941), pp. 17, 20, 21, 22, 52, 108.

it clear that this felony may include one or several of the other offenses against the revenue laws. But it would be unusual and we would not readily assume that Congress by the felony defined in § 145 (b) meant no more than the same derelictions it had just defined in § 145 (a) as a misdemeanor. Such an interpretation becomes even more difficult to accept when we consider this felony as the capstone of a system of sanctions which singly or in combination were calculated to induce prompt and forthright fulfillment of every duty under the income tax law and to provide a penalty suitable to every degree of delinquency.

The difference between willful failure to pay a tax when due, which is made a misdemeanor, and willful attempt to defeat and evade one, which is made a felony, is not easy to detect or define. Both must be willful, and willful, as we have said, is a word of many meanings, its construction often being influenced by its context. United States v. Murdock, 290 U. S. 389. It may well mean something more as applied to nonpayment of a tax than when applied to failure to make a return. Mere voluntary and purposeful [498] as distinguished from accidental, omission to make a timely return might meet the test of willfulness. But in view of our traditional aversion to imprisonment for debt, we would not without the clearest manifestation of Congressional intent assume that mere knowing and intentional default in payment of a tax, where there had been no willful failure to disclose the liability, is intended to constitute a criminal offense of any degree. We would expect willfulness in such a case to include some element of evil motive and want of justification in view of all the financial circumstances of the taxpayer.

Had § 145 (a) not included willful failure to pay a tax, it would have defined as misdemeanors generally a failure to observe statutory duties to make timely returns, keep records, or supply information— duties imposed to facilitate administration of the Act even if, because of insufficient net income, there were no duty to pay a tax. It would then be a permissible and perhaps an appropriate construction of § 145 (b) that it made felonies of the same willful omissions when there was the added element of duty to pay a tax. The definition. of such nonpayment as a misdemeanor, we think, argues strongly against such an interpretation.

The difference between the two offenses, it seems to us, is found in the affirmative action implied from the term "attempt," as used in the felony subsection. It is not necessary to involve this subject with the complexities of the common-law "attempt." The attempt. made criminal by this statute does not consist of conduct that would culminate in a more serious crime but for some impossibility of completion or interruption or frustration. This is an independent crime, complete in its most serious [499] form when the attempt is complete, and nothing is added to its criminality by success or consummation, as would be the case, say, of attempted murder. Although the attempt succeed in evading tax, there is no criminal offense

Holmes, The Common Law, pp. 65-70; Hall, Criminal Attempt-A Study of Foundations of Criminal Liability, 49 Yale Law Journal 789; Arnold, Criminal Attempts-The Rise and Fall of an Abstraction, 40 Yale Law Journal 53.

of that kind, and the prosecution can be only for the attempt. We think that in employing the terminology of attempt to embrace the gravest of offenses against the revenues, Congress intended some willful commission in addition to the willful omissions that make up the list of misdemeanors. Willful but passive neglect of the statutory duty may constitute the lesser offense, but to combine with it a willful and positive attempt to evade tax in any manner, or to defeat it by any means, lifts the offense to the degree of felony. Congress did not define or limit the methods by which a willful attempt to defeat and evade might be accomplished and perhaps did not define lest its effort to do so result in some unexpected limitation. Nor would we by definition constrict the scope of the Congressional provision that it may be accomplished "in any manner." By way of illustration, and not by way of limitation, we would think affirmative willful attempt may be inferred from conduct such as keeping a double set of books, making false entries or alterations, or false invoices or documents, destruction of books or records, concealment of assets or covering up sources of income, handling of one's affairs to avoid making the records usual in transactions of the kind, and any conduct, the likely effect of which would be to mislead or to conceal. If the tax-evasion motive plays any part in such conduct, the offense may be made out even though the conduct may also serve other purposes such as concealment of other crime.

In this case there are several items of evidence, apart from the default in filing the return and paying the tax, which the Government claims will support an inference of willful attempt to evade or defeat the tax. These go to [500] establish that petitioner insisted that certain income be paid to him in cash, transferred it to his own bank by armored car, deposited it, not in his own name but in the names of others of his family, and kept inadequate and misleading records. Petitioner claims other motives animated him in these matters. timate no opinion. Such inferences are for the jury. If on proper submission the jury found these acts, taken together with willful failure to file a return and willful failure to pay the tax, to constitute a willful attempt to evade or defeat the tax, we would consider conviction of a felony sustainable. But we think a defendant is entitled to a charge which will point out the necessity for such an inference of willful attempt to defeat or evade the tax from some proof in the case other than that necessary to make out the misdemeanors; and if the evidence fails to afford such an inference, the defendant should be acquitted.

The Government argues against this construction, contending that the milder punishment of a misdemeanor and the benefits of a short statute of limitation should not be extended to violators of the income tax laws such as political grafters, gamblers, racketeers, and gangsters. We doubt that this construction will handicap prosecution for felony of such flagrant violators. Few of them, we think, in their efforts to escape tax, stop with mere omission of the duties put upon them by the statute, but if such there be, they are entitled to be convicted only of the offense which they have committed.

Reversed.

2. UNITED STATES v. JOHNSON*

(319 U. S. 503. No. 4-Decided June 7, 1943)

1. Under Jud. Code § 284, a grand jury can be authorized to sit beyond the term of court at which it was organized only to finish investigations begun during that term. P. 510.

2. Where a grand jury sat to the end of the term at which it was organized and, by authority of an order of court, through the term next following, a further order authorizing it to continue to sit during the term next succeeding "to finish investigations begun but not finished" by it during the original and intermediate terms is to be read, not as attempting to authorize the finishing of investigations begun contrary to Jud. Code § 284 in the intermediate term, but as authorizing only the finishing of investigations begun during the original term. P. 509. 3. A grand jury is invested with broad investigatorial powers into what may be found to be offenses against federal criminal law. Its work is not circumscribed by the technical requirements governing the ascertainment of guilt once it has made the charges that culminate its inquiries. P. 510.

4. That for which a grand jury may be authorized to continue its sitting after the term during which it was organized is the general subject matter on which it originally began to investigate in that term. And where its sessions have been extended by order to a following term, it is not forbidden to inquire into new matters within the general scope of its original investigation. P. 511. 5. A grand jury, which began its investigation of systematic income tax evasions during a December 1939 Term in which it was organized, and which was allowed to continue its sitting during the next two terms (February and March) for the purpose of finishing the investigation, properly included in its indictment for an attempted evasion of taxes for the year 1939 the filing of a false return in March 1940 which was a part of the systematic, fraudulent practice investigated. P. 511.

[504] 6. Where an indictment alleged that the grand jury's investigation of the matters charged was begun but not finished at the term of court at which the jury was organized, and that the jury, pursuant to orders of court, had continued to sit during the two following terms for the purpose of finishing such investigation; and pleas and motions were filed seeking to put these allegations in issue and to have the indictment quashed upon the ground that it resulted from an investigation begun after the original term, beyond the competency of the grand jury, held that the Government was not required to answer or to assume the burden of supporting with proof the allegations of the indictment; and that the motion to quash was properly stricken on a preliminary motion by the Government. P. 512.

7. Where one person was charged in several counts with attempts to defeat and evade the payment of his income taxes for each of several years (made a felony by 145 (b) of the Internal Revenue Code), and with filing false returns on March 15th of each of the years in the process of such attempts and not merely with the offense of filing false returns, which is made a misdemeanor by § 145 (a) of that Code; and others were joined as aiders and abettors (who under § 332 of the Criminal Code are principals) charged with assisting him by their conduct during the years in question both before and after the returns were filed, but not as participating in the acts of filing, held that the counts, as against the aiders and abettors, were neither inconsistent nor duplicitous, nor objectionable as charging them in the same count as accessories both before and after the fact. P. 514.

8. The evidence concerning the connection of the defendant Johnson with a network of gambling houses, his winnings, and his private expenditures during the years in question was sufficient to warrant leaving the case to the jury. P. 515.

9. In a prosecution for attempts to avoid payment of income taxes, the fact that the defendant's private expenditures during the years in question exceeded his available declared resources held competent as evidence that he had some unreported income. P. 517.

10. One may aid and abet another in attempts to evade income taxes, without participating in the making of the other's false returns, by falsely pretending to be the proprietor of establishments from which the other's income was derived. P. 518.

*Together with No. 5, United States v. Sommers et al.

Evidence of the conduct, acts and admissions of persons charged as aiders and abettors amply warranted sending their cases to the jury. P. 518. [505] 11. Admission of testimony of an expert witness regarding income and expenditures of one of the accused in this case, although consisting of computations based on substantially the entire evidence in the record, held not an invasion of the province of the jury, where, in the light of the judge's charge, all issues are left to the independent, unforeclosed determination of the jury.|| P. 519.

123 F. 2d 111, 142, reversed.

CERTIORARI, 315 U. S. 790, to review the reversal of sentences imposed by the District Court in a prosecution of Johnson and others for alleged violations of penal provisions of the Revenue Acts of 1936 and 1938 and for conspiracy.

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

This is an indictment in five counts. Four charge Johnson with attemps to defraud the income tax for each of the years from 1936 to 1939, inclusive, and charge a dozen others with aiding and abetting Johnson's efforts. The fifth count charges Johnson and the others with conspiracy [506] to defraud the income tax during those years. The substantive counts charge violations of the penal provisions of the Revenue Acts of 1936 and 1938, now embodied in general form in § 145 (b) of the Internal Revenue Code, 53 Stat. 63, 26 U. S. C. § 145 (b). The conspiracy count is based on the old § 5440 of the Revised Statutes, which later became § 37 of the Criminal Code, 35 Stat. 1096, 18 U. S. C. § 88.

As to four of the defendants, the cause was dismissed upon motion of the United States Attorney; three others were acquitted by the jury. Of the six remaining defendants, the jury brought in a verdict of guilty on all five counts against Johnson, Sommers, Hartigan, Flanagan, and Kelly, and against Brown on counts three and four, the substantive counts for the years 1938 and 1939, and on the conspiracy count. The district court imposed on Johnson a sentence of five years on each of the first four counts and of two years on the conspiracy count, as well as a fine of $10,000 on each of the five counts. The terms of imprisonment were to run concurrently and the payment of $10,000 would discharge all fines. Lesser concurrent sentences and fines were imposed on the other defendants.

The Circuit Court of Appeals reversed the judgments. Its holding undermined the entire prosecution in that it found the indictment void because it was returned by an illegally constituted grand jury. But it went beyond that major ruling. It found the four substantive counts of the indictment, in so far as they charged defendants as aiders and abettors, fatally defective. Proceeding to the merits, the court held that the case properly went to the jury against Johnson on the last four counts and that the evidence sustained the verdict against all the defendants on the conspiracy count, but that a verdict should have been directed for Johnson on the first count and for the other defendants on all but the conspiracy count. Finally, it found that the testimony of an expert accountant for the [507] government invaded the jury's province and that its admission was prejudicial error. 123 F. 2d 111. Judge Evans dissented on all points. He found no infirmities in the indictment or in the rulings by the trial judge, and thought that the case was properly committed to the jury.